SPECIAL REPORT: Texas tolling bill with moratorium now law

Tuesday, June 12, 2007 – Texas Gov. Rick Perry signed a compromise bill into law Monday, June 11, that is intended to slow down his plans for building toll roads throughout the state.

Spurred by a public outcry against private toll roads during elections a year ago, House and Senate lawmakers overwhelmingly approved legislation that would impose a two-year moratorium on most new private toll roads in the state for two years. After weeks of contentious talks with the governor’s office, legislators successfully negotiated a deal intended to thwart a possible veto and special session.

The new law, previously SB792, took effect immediately when Perry signed it.

Perry vetoed the first version to reach his desk, citing concerns it would jeopardize the state’s entire transportation system, as well as transfer too much road-building authority from the state to local governments.

The legislation was revised and the governor said he was happy with the end result of talks that produced the new law.

“Under this legislation, every planned road construction project will move forward as scheduled, local leaders will have more authority to build new toll roads and all toll revenue will be used for transportation projects in the area it was raised,” Perry said in a written statement.

Exceptions to the new law have been be made for about a dozen projects already in the works, including projects in Dallas, Fort Worth and Houston.

The length of leasing contracts will now be limited to 50 years, instead of 70 years as previously allowed. The new law also requires any future toll road projects to undergo a “market valuation” to determine their value. Local toll road agencies get first crack at projects if they can muster the up-front money.

A separate provision limits comprehensive development agreements used in contracts for public-private road building. The agreements are intended to allow the Texas Department of Transportation to complete road-building projects more quickly and economically by using a single contract for both the design and construction tasks.

Another provision in the new law allows TxDOT to issue $3 billion in bonds to borrow against future fuel tax revenue as equity for state toll roads.